F.N.B. Corp 2026 Q3 Earnings Call

Please go ahead. Good morning, and welcome to our earnings call.

This conference call of F.N.B. Corporation and the reports it files with the Securities and Exchange Commission often contain forward-looking statements and non-GAAP financial measures. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported results prepared in accordance with GAAP. Reconciliations of GAAP to non-GAAP operating measures to the most directly comparable GAAP financial measures are included in our presentation materials and in our earnings release. Please refer to these non-GAAP and forward-looking statement disclosures contained in our related materials, reports, and registration statements filed with the Securities and Exchange Commission and are available on our website. A replay of this call will be available until Tuesday, October 27, and the webcast link will be posted to the About Us Investor Relations section of our corporate website.

I will now turn the call over to Vince Delie, Chairman, President, and CEO.

Thank you, and welcome to our third quarter earnings call. Joining me today are Vince Calabrese, our Chief Financial Officer, and Gary Guerrieri, our Chief Credit Officer. F.N.B. reported third quarter net income of $153 million or $0.43 per share. This brings year-to-date earnings per share to $1.23, a 13% increase over the same period in 2025. F.N.B. produced solid revenue of $469 million, benefiting from a diverse income stream with record net interest income of $377 million. This quarter, F.N.B. repurchased $51 million or 2.7 million shares of common stock, bringing the year-to-date buyback to $133 million or 7.4 million shares, representing 2.1% of total shares at the beginning of the year. Tangible book value per common share increased 7% year over year to $12.28. Even with the buyback activity and negative impact of AOCI, demonstrating strong profitability levels and peer-leading internal capital generation.

Total loans ended the quarter at $36.5 billion, an 8.5% annualized linked-quarter increase. F.N.B.'s loan growth has once again exceeded the published H.8 data as we continue to gain market share across our geography, led by commercial and industrial, equipment finance, consumer lending, and seasonal residential mortgage production. Annualized linked-quarter deposit growth of 9% also outpaced the industry, benefiting from deepening customer relationships as well as seasonal deposit inflows. Even with the strong deposit growth and increased competition, the cost of interest-bearing deposits was stable, with only a one basis point increase. Non-interest-bearing deposits ended the quarter over $10 billion, an annualized increase of 3%. The mix of non-interest-bearing deposits to total deposits ended the quarter at 26%, a level we have held for eight straight quarters.

As we have frequently discussed, we utilize all our tools, including data science, to price our deposits and support our client base while protecting net interest margin. This quarter, net interest margin increased four basis points to 3.29%. The FDIC deposit market share data released in September revealed that F.N.B. outperformed overall market deposit growth to maintain strong market share positions. We now rank in the top 10 in over 80% of our MSAs, top five in 50%, and top three in 30%. We continue to build out our fee-based platform, including our recent announcement to expand our Family Wealth Advisory to serve ultra-high net worth clients with additional investments in specialized, sophisticated advisory services and advanced solutions.

This elite wealth advisory office aligns with our strategic approach to develop and expand new high-value business units that complement our existing products and services, driving a larger percentage share of total revenue. Our leadership team has established or significantly expanded 11 business lines, including two added last year, investment banking and public finance, with both contributing to fee income this year. Investment banking has closed several deals with many opportunities in the pipeline. Public finance has participated in a number of large bond underwritings and was recently awarded a significant lead left opportunity this quarter. We remain steadfast in our approach to consistent underwriting and managing credit risk to maintain a balanced, well-positioned portfolio, enabling us to serve our customers through various business cycles. I would now like to turn the call over to Gary to discuss our credit results for the quarter.

Gary? Thank you, Vince, and good morning, everyone.

We had another solid quarter of consistent credit performance across our portfolios. Delinquency totaled 75 basis points, up slightly in the quarter, with NPLs and OREO remaining at near historical lows totaling 33 basis points, up two bips in the quarter and down four bips on a year-over-year basis. Net charge-offs reflect strong performance at 12 basis points, an improvement from 19 basis points in the prior quarter. Criticized loans increased 40 basis points in the quarter, with anticipated resolutions expected to offset this increase in the quarter ahead. Total funded provision expense for the quarter stood at $19.2 million, once again supporting our strong loan growth. Our ending funded reserve now stands at $455 million, an increase of $8.1 million ending at 1.25%.

When including acquired unamortized loan discounts, our reserve stands at 1.29%, and our NPL coverage position remains strong at 396% inclusive of the discounts. We continue to maintain qualitative overlays for potential supply chain impacts due to the events in the Middle East, oil and diesel price volatility, and ongoing tariff uncertainty in North America. Our consistent and proactive approach to managing credit risk and solid allowance coverage enables us to maintain a strong credit profile through various economic environments. Turning to loan growth, we are pleased with the resilience of our customer base, which continues to perform well despite recent rate increases and ongoing inflationary pressures. Once again, we saw strong production across all consumer categories this quarter while maintaining our solid credit metrics with average origination FICO scores of 785 and delinquency and charge-offs of 72 and 5 basis points, respectively.

Despite a slight downtick in utilization, C&I loan growth was strong in the quarter, particularly in the manufacturing sector. CRE continued to decline as expected due to secondary market activity, ending at 182% of Tier 1 capital plus allowance. The declines were partially offset by a number of new projects originated in the quarter, and we are encouraged by the level of new opportunities we are seeing across our markets. In closing, despite the continued macroeconomic volatility, our loan growth was strong in the quarter in both the wholesale and retail portfolios. Our loan portfolio remains well-positioned, reflecting solid performance across each asset class with credit metrics near historical lows. Pipelines continue to be robust as we enter the fourth quarter, positioning us well to achieve our desired growth targets this quarter and in the year ahead.

I will now turn the call over to Vince Calabrese, our Chief Financial Officer, for his remarks.

Thanks, Gary, good morning. Today, I will review the third quarter financial results and walk through our full-year guidance. Third quarter net income totaled $153 million, or $0.43 per share, driven by strong growth in C&I and consumer loans and a 4-basis point sequential increase in the net interest margin. Book total loans and leases ended the quarter at $36.5 billion, an 8.5% annualized linked-quarter increase. Growth of $435 million in consumer loans and $333 million in commercial loans and leases drove the increase. Book C&I loans grew at a 20% annualized linked-quarter rate for $407 million, driven by growth across multiple markets, most notably the Cleveland and Pennsylvania markets. CRE balances continued to be impacted by payoffs as expected and were down $90 million linked quarter. Seasonal growth in residential mortgages and growth in HELOCs and indirect auto fueled the rise in consumer loans.